Following a promising 2023, the growth momentum of the pharmaceutical sector slowed in 2024, particularly during the first two quarters.

Pharmaceutical companies faced numerous challenges, including fluctuations in raw material prices, weakened purchasing power due to tighter spending, and rising competitive pressures. However, in early 2025, pharmaceutical stocks have been rebounding strongly, signalling a promising year ahead with new growth drivers.

A medicine packaging facility at IMP’s EU-GMP factory

On February 11, pharmaceutical stocks saw notable gains, with IMP (Imexpharm Pharmaceutical JSC) hitting its daily price ceiling at VND49,650 ($1.95) per share. Over the past year (as of February 8), IMP’s stock has surged by 67.54 per cent, with an average daily trading volume of 101,000 shares.

The rise in pharmaceutical stocks is often driven by merger and acquisition activities with international pharmaceutical corporations. Investors are closely watching IMP’s new waves, anticipating potential shifts in its major shareholder structure.

Workers at an IMP factory

In 2025, Vietnam’s pharmaceutical sector stands to gain from new bidding policies that favour domestic companies meeting EU-GMP standards. The Ministry of Health has issued Circulars 03/2024 and 07/2024, stipulating that for Group 1 and Group 2 drugs: if at least three domestic manufacturers meet EU-GMP or equivalent standards and fulfill technical, quality, pricing, and supply capacity criteria, imported drugs will not be eligible for bidding.

According to a report by market research organisation IQVIA for the third quarter of 2024, high-tech, high-value pharmaceutical products, particularly vaccines, are driving market growth.

The report indicates a compound annual growth rate of 10.4 per cent per year from 2022 to 2024, with on-year growth of 9 per cent as of the moving annual total for Q3, 2024. The report further highlights that domestic pharmaceuticals account for 42 per cent of the market, while imports still dominate with 58 per cent.

This scenario presents a significant opportunity for local companies to enhance production capabilities, invest in technology, and elevate quality to international standards. By doing so, they can compete effectively with imports and strengthen their position in Group 1 and Group 2 bidding, gradually replacing foreign medicines in the market.

Optimising research and development for sustained growth

Among listed companies, Imexpharm leads with three EU-GMP-certified factory clusters and 12 EU-GMP-certified production lines. Its deep investment in R&D and high-tech pharmaceuticals has driven its sustained growth, outperforming many other major players. According to its 2024 financial report, Imexpharm remains the leader in the antibiotic market and ranks among the top three in hospital bidding channels.

A part of the manufacturing system at an IMP EU-GMP factory

Investment in technology and R&D has empowered the pharmaceutical industry to innovate and develop new products that cater to demographic shifts, evolving disease trends, and long-term growth.

Fitch Solutions projects that Vietnam’s pharmaceutical market will reach $16.1 billion by 2026, driven by rising per capita pharmaceutical spending as income levels improve and public health awareness increases.

Despite the growth prospects, pharmaceutical companies continue to face significant challenges. The revised Pharmaceutical Law has intensified competition with multiple registration numbers for a single active ingredient. Product life cycles in the market are short, while R&D investments remain substantial. As a result, innovation remains a key pillar of Imexpharm’s strategy for sustaining growth through high-tech pharmaceutical products.

In 2024, the company launched 24 new products and ongoing 98 R&D projects. The company has also expanded its European market presence with 28 marketing authorisations covering 11 products, strengthening its foundation for global expansion. In 2025, Imexpharm is making a strategic shift towards high-value products, particularly injectables and dispersible tablets, aligning with global pharmaceutical industry trends.

The company reported net revenue of $86.7 million in 2024, marking a 10.6 per cent increase from the previous year. This leading growth was driven by a strong expansion in the ethical drugs channel, and a broader injectable drug portfolio. Additionally, persistent sales efforts in the over-the-counter channel helped Imexpharm maintain stability despite stagnant retail market growth among domestic companies.

Tran Thi Dao, general director of Imexpharm, emphasised the company’s 2025 objectives.

“In 2025, Imexpharm will continue deep investments in R&D, leveraging EU-GMP capabilities, advancing special formulation technologies, developing bioequivalent products, and commencing the Cat Khanh Pharmaceutical Complex. These initiatives aim to meet market demand, elevate our position in the high-value pharmaceutical segment, and secure a competitive advantage in bidding processes,” Dao said.